Mixed sentiments were witnessed in the local currency market last week as most of the currency investors stayed to the sidelines amid concerns over the political situation and pre-budget uncertainty.

The rupee exhibited slight downward pressure against the dollar after trading in positive mode for more than a month. While the parity continued to move in narrow band with the rupee under minor pressure on the interbank market, the dollar stage marked recoveries in the open market.

The local currency commenced the week on a dismal note, turning negative in the first session, after posting nine paisas loss on the buying and eight paisas loss on the selling counter at Rs104.75 and Rs104.76 from the prior weekend level of Rs104.66 and Rs104.68.

The dollar staged a slight recovery after the rupee in the fourth session shed five paisas and slipped to Rs104.79 and Rs104.80, close to a level last seen on April 19. On a week-on-week basis, the dollar on the interbank market gained 15 paisas against the rupee.

In the open market, the rupee/dollar parity ended its month-long firmness as the rupee in the first session, rupee drifted lower at Rs104.80 and Rs105.00 against the last closing level of Rs104.75 and Rs104.95.

The rupee continued its falling streak on persistent demand from banks and importers for the second straight day, losing 10 paisas that enabled the dollar to climb to Rs104.90 and Rs105.10.

The rupee downslide persisted against the dollar for the fourth straight day. Crossing Rs105 barrier on the buying counter, the rupee dipped to near a five-week low at Rs105.10 and Rs105.30 after shedding 10 paisas more against the dollar. During the week, the dollar in the open market recovered 35 paisas against the rupee before hitting a five-week high.

Against euro, the rupee commenced the week on negative note losing 10 paisas at Rs118.60 and Rs119.60 in the first session after snapping three consecutive gains in the last three sessions of the previous week. However, the rupee managed to trim overnight losses in the second session when it posted five paisas recovery at Rs118.55 and Rs119.55.

The euro continued its downslide against the rupee for the second straight day after it suffered 30 paisas loss in the third trading session, changing hands at Rs118.25 and Rs119.25 as the euro in overseas trade hit its lowest level against the greenback since April 26.

Continuing its upward march against the euro for third day in a row, the rupee posted 65 paisa gain in the fourth trading session, the week’s biggest single day gain, that pushed euro to almost a month lows at Rs117.60 and Rs118.60. Finally the week ended on a negative note as the rupee lost 45 paisas in the closing session after gaining 100 paisas in the previous three sessions that dragged euro slightly higher at Rs118.05 and Rs119.05. On a week-on-week basis, the rupee still managed to gain 45 paisas against the euro.

Published in Dawn, Business & Finance weekly, March 23rd, 2016